Digital, SMEs To Drive Insurance Uptake As Economy Recovers

Financial services firm UAP Old Mutual Group says shifting trends due to Covid-19 will position under-served insurance segments like small enterprises and uninsured but digitally-savvy consumers as the next growth frontier in the underwriting business.

UAP Old Mutual General Manager Health and Innovation Japheth Ogalloh say continuous innovation that meets ever-shifting consumer expectations, coupled with aggressive online customer engagement strategies, will be the key drivers of competitiveness of insurance firms in a post-pandemic context.

Mr. Ogalloh further says the industry shifted to a new operating model to ensure business and service continuity amidst the disruption of Covid-19 with most activities migrating online. This, he adds, has seen UAP Old Mutual now managing over 90 percent of its business operations and interactions with clients online.

“One of the key learnings out of the Covid disruption is the paramount need for continuous innovation and devising ways to engage with customers virtually owing to prevailing health restrictions. This has meant re-imagining how we work and deliver insurance to consumers so as to keep our employees and clients safe,” explained Mr. Ogalloh.

The UAP Old Mutual executive is optimistic that the projected rebound in the economy in the coming months will spur uptake of insurance products, reversing the negative trends witnessed since March last year when the first case of Covid-19 was reported in Kenya.

“Immediately following the onset of the pandemic, there was a dip in insurance claims, both health and general insurance, as people shunned hospitals and movement restrictions affected businesses like the transport sector. That has since changed and we are seeing positive signals as the economy gradually reopens.”

According to Mr. Ogalloh, individuals and businesses have become increasingly conscious of the value of insurance in protecting lives and assets, hence the anticipated growth across underwriting segments – health, property, motor, and life.

He singled out the small business sector as being crucial to the recovery of the insurance sector given that 98 percent of businesses in Kenya fall into that category.

“SME sector is critical to the insurance industry as it provides a growth area. It was one of the hardest hit by the initial impact of the pandemic. However, we are working with SME sector stakeholders to redesign products that are unique based on their specific needs, for instance, flexible premium payment plans to accommodate cash flow challenges,” said Mr. Ogalloh.

He proposes that the government should sustain stimulus measures to cushion small enterprises from the lingering economic impact of the pandemic. “One way to achieve this is through public-private partnerships where SMEs are positioned as the drivers of economic recovery, for instance, contracts for public goods and services.”

On digital insurance, UAP Old Mutual has launched several products mostly targeting tech-savvy consumers seeking affordable and easily accessible insurance. This includes a last-expense digital cover retailing at as low as Ksh 50 per month.

The firm has also partnered with an IT provider to set up an Electronic Data Interchange system that facilitates fully electronic claims processing thus eliminating the need for paperwork from service providers and intermediaries.

“Investing in our digital capacity has enabled 90 percent of operations to be conducted online. With almost all our staff now working remotely, we have to ensure business continuity and a seamless customer experience, even as we scale up other innovations to make our products attractive to consumers.”

The health insurer also introduced a digital wellness app that allows users to track key healthy lifestyle metrics like physical exercise, as well as telemedicine solutions that help deliver medication to clients’ doorsteps and for patients to consult doctors online.